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BRILLIANT’S Long Term Financing and Valuation of Goodwill & Shares 181

4. Foreign Currency Options 4. \$m°aoZ H$aÝgr Am°ßeÝg
Foreign currency options are those financial \$m°aoZ H$a§gr Am°ßeÝg do \$m`Z|{e`c BÝñQ¯>_oÝQ²>g h¢
instruments which have assumed a vital {OÝhmo§Zo g§nyU© {díd Ho$ \$m`Z|{e`c _mH}$Q> _| AnZm
importance in the financial markets all over the
_hÎdnyU© ñWmZ ~Zm {c`m h¡Ÿ& `o {d[^Þ ~mOma à{V`mo{J`m|
world. These are being used widely by different
O¡go- BånmoQ>©g©, EŠgnmoQ>©g©, Q´>oS>g©, ñn¡Š`ycoQ>g©, ~¢H$g©
market participants like importers, exporters,
VWm AÝ` \$m`Z|{e`c B§ñQ>rQ²>`yeZ Am{X Ho$ Ûmam ì`mnH$
traders, speculators, bankers and other financial
institutions. They protect the holders against Vm¡a na à`moJ {H$`m OmVm h¡Ÿ& `o hmoëS>g© H$mo EŠgM|O
the adverse risk in the exchange rates. aoQ²>g Ho$ à{VHy$c Omo{I_m| go ~MmVo h¢Ÿ&
Foreign currency option is a financial \$m°aoZ H$aÝgr Am°ßeZ EH$ \$m`Z|{e`c BÝñQ¯>_oÝQ> h¡
instrument that gives the option holder a right Omo Am°ßeZ hmoëS>a {XE JE A_mCÝQ> H$mo EH$ {ZpíMV
to buy or sell a given amount of foreign
exchange at a fixed price per unit for a specified g_`md{Y Ho$ {cE {\$Šg àmBg na \$m°aoZ EŠgM|O H$s
time period. A foreign currency option is a IarXr-{~H«$s Ho$ A{YH$ma XoVm h¡Ÿ& EH$ \$m°aoZ H$aÝgr
contract for future delivery of a specific Am°ßeZ, AÝ` H$aÝgr Ho$ EŠgM|O _| EH$ {deof H$aÝgr
currency in exchange for another in which the H$s â`yMa {S>crdar H$m H$m°ÝQ´>oŠQ> h¡, {Og_| Am°ßeZ Ho$
holder of the option has right to buy and sell a
particular currency at an agreed price for or hmoëS>a Ho$ nmg `h A{YH$ma ahVm h¡ {H$ dh Cg g_`md{Y
within specified period. _| `m V` H$s_V na Cg H$aÝgr H$mo IarX `m ~oM gH|$Ÿ&
In the last decades, the foreign currency ~rVo XeH$m| _|, \$m°aoZ H$aÝgr Am°ßeÝg àm`: hoqOJ
options have been frequently used as a hedging Qy>c VWm Q´>oqS>J Ho$ CÔoí` go à`moJ {H$`o Om aho h¢
tool and for trading purposes, specially in {deofH$a {dH$mgerc Xoem| _|Ÿ& H$B© H$_{e©`c ~¢Šg VWm
developed countries. A number of commercial
banks and other capital markets offer flexible AÝ` H¡${nQ>c _mH}$Q> âcopŠg~c \$m°aoZ H$a§gr Am°ßeZ
foreign currency option. H$s gw{dYm XoVo h¢Ÿ&
5. Foreign Currency Convertible 5. \$m°aoZ H$aÝgr H$Ýd{Q>©~c ~m°ÝS²>g
Bonds
A bond is a debt security issued by the ~m°ÝS> EH$ S>oãQ> {gŠ`y[aQ>r h¡ Omo {H$ ~m°amoAa Ûmam
borrower, purchased by the investor through Bí`y H$s OmVr h¡ VWm BÝdoñQ>a Ûmam A§S>aamBQ>am| Ho$ g_yhm|
the intermediation of a group of underwriters.
Ho$ _mÜ`_ go IarXr OmVr h¡Ÿ&
Convertible bonds are bonds that can be H$Ýd{Q>©~c ~m°ÝS²>g do ~m°ÝS²>g h¢ Omo Bí`y H$aZo dmcr
exchanged for equity shares either of the issuing H§$nZr `m AÝ` H§$nZr Ho$ B{ŠdQ>r eo`am| go EŠgM|O {H$`o
company or some other company. The
conversion price determines the number of Om gH$Vo h¢Ÿ& H$Ýde©Z àmBg BgH$m {ZYm©aU H$aVm h¡ {H$
shares for which the bond will be exchanged. {H$VZo eo`am| go ~m°ÝS> EŠgM|O {H$`m OmEJmŸ& H$Ýde©Z
The conversion value is the market value of the d¡ë`y eo`am| H$s _mH}$Q> d¡ë`y hmoVr h¡ Omo {H$ Bí`y Ho$ g_`
shares which is less than the face value of the
bond at the time of issue. As the share price ~m°ÝS> H$s \o$g d¡ë`y go H$_ hmoVr h¡Ÿ& O¡go-O¡go eo`a H$s
rises, the conversion value rises. H$s_V| ~‹T>Vr h¢, d¡go-d¡go H$Ýde©Z d¡ë`y ^r ~‹T>Vr h¡Ÿ&